Absa, a South African bank, has barred its credit card holders from buying cryptocurrencies on international exchanges. Through its private banking contact center, the bank had initially stated that the barring was a result of Binance’s failure to comply with the set regulations.
Binance, on the other hand, claims that it fully complies with the set regulation and has refuted the bank’s claims. They have attributed the block to South Africa’s foreign exchange rules set by the country’s reserve bank-the SARB.
The official position of the SARB on cryptocurrencies is that they are not legal tender and that traders may turn them down as means of payment. It further states that crypto operates independently from the central bank and has neither backing nor guarantee from the SARB. Therefore, a lack of regulations, compliance requirements or laws governing them means that trading is done at personal risk without legal protection or recourse.
Absa, which had previously permitted its customers to participate in crypto activities, said through their spokesperson that the issue was an industry matter and not uniquely tied to the bank. They further urged their customers to seek detailed information from the SARB.
Nigeria’s central bank also banned financial institutions in the country from offering crypto-related services in February this year. Similarly, The Reserve Bank of India has also consistently expressed its reservations regarding cryptocurrencies.
Africa has joined the rest of the world in the adoption of digital currencies. It generated over $17 million in P2P trading volume this year and is currently one of the most active continents in trading bitcoin. African countries such as Tanzania have begun working towards creating their own Central Bank Digital Currency (CBDC).